Beyond REMA: Three provocations for the future of the UK power market
Natasha Beedell
New report warns of the growing issue of constraint costs within the GB electricity market, offers solutions for policymakers and make wind farms pay for them.
Stonehaven's new report, commissioned by Project Tempo, warns that the UK’s journey towards its 2030 clean power target risks being derailed by growing political and economic headwinds – unless decisive reforms are made to tackle the mounting costs of electricity system constraints.
Titled Beyond REMA: Three provocations for the future of the UK power market, the paper examines the political, technical, and market challenges facing the government’s Clean Power 2030 (CP2030) mission – which targets 27–29GW of onshore wind and 43–50GW of offshore wind capacity by the end of the decade.
Against the backdrop of an increasing need for wind capacity, the paper warns that the next phase of renewable deployment could trigger a “perfect political storm” in the early 2030s, as rising system costs, growing grid constraints, and increased reliance on fossil back-up power all coincide with intensifying public scrutiny and political opposition.
Constraint costs, payments that are made when renewable power cannot be transport across the grid, have become one of the most significant yet least understood drivers of rising energy bills. The paper reveals that balancing costs reached £2.7 billion in 2024/25, with UK consumers footing £1.7 billion of that total, and could rise further as more renewable generation connects to limited grid infrastructure.
“The UK cannot afford to be seen to spend billions on renewable infrastructure only to throw power away at a further cost to the public purse,” the paper warns. “Constraint costs are fast becoming a political and reputational risk for the energy transition.”
The paper calls for urgent policy reforms to curb rising constraint costs and protect public confidence in net zero – calling for greater transparency from wind operators, a “polluter pays” approach to congestion charges, and a reworked Offtaker of Last Resort (OLR) mechanism to stop overproduction and protect consumers.
Adam Bell, Director of Policy at Stonehaven, said: “The success of Clean Power 2030, and ultimately the affordability of net zero, depends on our ability to use renewable assets more intelligently, not simply building more of them.
“Without reform, constraint costs will continue to risk, undermining public trust and investor confidence. With the right market signals, the UK can make this next phase of the clean energy transition a success story of smart design – not consumer tolerance.”
Read the full report
